If you run a hospitality or holiday business, the chances are that you’re using some sort of online booking system.
It’s a no-brainer. Why would you want to take reservations manually? By automating the booking process, your processes become more efficient, and staff have more time for the important stuff — delivering great customer service.
These automated systems offer lots of advantages, but they also come with their own challenges. In this post, we’re exploring the pros and cons of different online booking systems.
But first, let’s establish the basics.
What is an online booking system?
There are 3 main types of online booking systems.
- Direct booking systems where customers book directly through your own website
- Third-party systems where customers are redirected to a cloud-based booking platform
- Indirect booking systems where customers book via an agent’s website
1. Third party booking systems
Third-party booking systems are commonly used by restaurants and hotels. When customers click the button on a reservation landing page, they are automatically redirected to a third-party system held in the cloud. This is where they input the booking details.
The most popular are SevenRooms and DesignMyNight. Both are cloud-based data platforms which allow restaurants or hotels to take reservations, manage bookings and collect customer information.
The advantages of third-party systems
The major benefit of these third-party platforms is convenience. They’re accessible from any device, offer options in multiple languages, and they provide real-time availability.
These systems reduce errors such as double-booking, and they’re scalable. You can adjust capacity in line with fluctuating demand without having to make major infrastructure changes.
They also allow you to track the average spend per booking — plus, how much individual customers have spent. While this data is undoubtedly useful, it brings us onto a major downside of these systems.
Limited analytics
Because users are redirected to a cloud-based system, they move away from a key data collection source — your website.
You know someone has reached your landing page, then made a booking. You’re aware of how much money they spent. But how did this person reach your website?
If you’re running any kind of digital marketing campaign, this information is crucial. Were the highest spending customers from Google ads? Organic search? Social media?
You will never know. Third-party booking systems can’t deliver this valuable information.
Integration downsides of third-party booking systems
Many hospitality businesses use several different third-party booking systems. With a hotel, for example, there’s one system for booking tables, a different one for accommodation and another for events.
For guests to book everything at the same time, each system needs to work together seamlessly — but the fact is, they don’t.
There are major challenges when it comes to integrating different third-party booking platforms. Each one uses separate API protocols and, in order to integrate them, customised coding is required. It’s awkward, and often eye-wateringly expensive.
2. Indirect booking systems
Indirect bookings are generated by agents who sell your hospitality or travel experiences via their own websites.
They’re popular with customers because it’s easy to compare options and prices, then make the booking, all in one place.
The advantages of indirect booking systems
Agency websites have the marketing clout to draw in bookings on a large scale.
Aside from generating healthy sales, indirect booking systems also provide an opportunity to increase brand reach. You can gain visibility without the need for significant marketing efforts.
Commission
On the downside, you’ll be charged a pretty hefty commission on every booking.
You can’t increase prices to cover the cost because this will put you at a disadvantage. Unless your pricing is competitive, it will be tough to compete with other providers on the same platform.
The disadvantages of just one provider
It’s not ideal to rely on just one provider for your main source of bookings or reservations.
Fee percentages can rise, policies could change, or they may simply choose to end the partnership. If one provider is your only means for collecting customer reservations, you’ll have no choice over paying the increased cost or losing the majority of your bookings.
3. Direct booking systems
Direct booking systems are embedded on your own website. They allow customers to book directly with you, rather than using a third party platform or booking agent.
The advantages of direct booking systems
Firstly, with no agency commission to pay, the entire booking cost is yours. Secondly, you have control over the booking process because you can set your own rules — deposits, for example.
Plus, you avoid the problem with collecting data. You know exactly where each booking came in from and how much customers spent.
For obvious reasons, many businesses prefer direct bookings via their own website, but find it difficult to compete with the pulling power of agency websites. If that’s the case with you, it’s time to mention SEO.
Search engine optimisation
Ideally, you want your website to appear higher on Google rankings than the agency website. How do you do this?
It requires work, namely a well-crafted SEO and content strategy targeting keywords which relate to the experiences you offer.
At the same time, it’s a smart idea to run campaigns via social media, email or Google ads letting customers know that it’s cheaper to make a direct booking. This could be via special offers, discounts or loyalty rewards.
If you’d like some help with this, get in touch with Neil and Sonya at Pumpkin. We’ll have a quick chat about the most cost-effective options.
